The sharp declines experienced in the equity markets in the fourth quarter of 2018 brought reminders of the financial crisis to the fore.

In our view, the current environment does not necessarily point to further declines for the equity market in 2019.

The fourth quarter of 2018 proved to be one of the most difficult to navigate since the financial crisis. While the causes of the equity market pullback were fairly well articulated – tariffs, the Federal Reserve, mid-term elections, mixed economic data – the velocity at which investor sentiment deteriorated was surprising.

Over the past several years, technology stocks have become an increasingly important part of major indexes, and as such, the valuations and price movements of these stocks attract a significant amount of attention.

The fourth quarter was challenging for investors, not only because the equity markets experienced meaningful declines, but also because it is perhaps the first time in the current cycle where many investors were left wondering if the end of the rally was finally at hand.